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Ontario's middle east | Ben, I am a participant with White Commercial Corporation. Don White is the coauthor of your book. We have a secret weapon named Phil that tracks and charts this for us. We watch basis everywhere not just our local market. We notice basis trends tend to move across the country in waves so it helps us anticipate what our own markets may do. It would be a good idea to get some graph paper and plot your local bids like this. It can show you seasonal moves when you should and shouldn't move grain. Be sure to note how we plot that. The vertical axis is used to plot the spreads between the months. Then plot the basis relative to its respective futures month. This adjusts so you see the real picture as to whether basis is increasing or decreasing. When I see guys plotting basis only, I look at it and say what good is that without knowing what the spread between the contracts are ? There are sources of historical data to give you a head start.
Your market has been a very interesting one this winter. It has avoided the weakness that the northern markets have seen. You guys are fortunate to have such a huge usage in that area. Couple that with biweekly storms and the beast just can't get enough to eat. Look at what's gone on here though with the structure. Like I projected a week or two ago we now have a small inversion from N to U. This gives us a pretty flat market structure and (sorry guys I gotta say it), the basis will follow that flat structure forward.
Now, that's not to say that we can't take some detours from that overall path. Indeed we likely will. This is where knowing what historically are good and poor levels .If you are at historically poor levels, I would suggest looking for an uptick. If you have good levels, I would suggest a dip might be expected. I would submit that you are more like the latter and contemplate the possibility that farmers have some corn that's a little on the wet side and they may want it moved before planting. We have seen a run up in the futures and there will be a need for cash in the coming months. These are things that drive basis.
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Maizeing
